0000895345-05-000081.txt : 20120628 0000895345-05-000081.hdr.sgml : 20120628 20050124173039 ACCESSION NUMBER: 0000895345-05-000081 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 9 FILED AS OF DATE: 20050124 DATE AS OF CHANGE: 20050124 GROUP MEMBERS: APPALOOSA INVESTMENT LIMITED PARTNERSHIP I GROUP MEMBERS: APPALOOSA MANAGEMENT L.P. GROUP MEMBERS: APPALOOSA PARTNERS INC. GROUP MEMBERS: DAVID A. TEPPER GROUP MEMBERS: PALOMINO FUND LTD. SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: BEVERLY ENTERPRISES INC CENTRAL INDEX KEY: 0001040441 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-SKILLED NURSING CARE FACILITIES [8051] IRS NUMBER: 621691861 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-52627 FILM NUMBER: 05545367 BUSINESS ADDRESS: STREET 1: ONE THOUSAND BEVERLY WAY CITY: FORT SMITH STATE: AR ZIP: 72919 BUSINESS PHONE: 5014526712 MAIL ADDRESS: STREET 1: ONE THOUSAND BEVERLY WAY CITY: FORT SMITH STATE: AR ZIP: 72919 FORMER COMPANY: FORMER CONFORMED NAME: NEW BEVERLY HOLDINGS INC DATE OF NAME CHANGE: 19970604 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: APPALOOSA MANAGEMENT LP CENTRAL INDEX KEY: 0001006438 IRS NUMBER: 223220835 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 26 MAIN ST STREET 2: 1ST FLOOR CITY: CHATHAM STATE: NJ ZIP: 07928 BUSINESS PHONE: 9737017000 MAIL ADDRESS: STREET 1: 26 MAIN ST STREET 2: 1ST FLOOR CITY: CHATAM STATE: NJ ZIP: 07928 SC 13D 1 dg13d-beverly_appaloosa.txt SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 Schedule 13D Under the Securities Exchange Act of 1934 Beverly Enterprises, Inc. ----------------------------------------- (Name of Issuer) Common Stock, $.10 par value per share ----------------------------------------- (Title of class of securities) 087851309 ----------------------------------------- (CUSIP Number) Kenneth Maiman, Esq. Bradley Takahashi, Esq. Appaloosa Management L.P. Franklin Mutual Advisers, LLC 26 Main Street, First Floor 51 John F. Kennedy Parkway Chatham, NJ 07928 Short Hills, NJ 07078 (973) 701-7000 (973) 912-2000 Arnold M. Whitman Richard Marks, Esq. Formation Capital, LLC Northbrook NBV, LLC 1035 Powers Place 500 Skokie Blvd, Ste. 310 Alpharetta, GA 30004 Northbrook, IL 60062 (770) 754-9660 (847) 559-1002 Robert C. Schwenkel, Esq. Fried, Frank, Harris, Shriver & Jacobson LLP One New York Plaza New York, NY 10004-1980 (212) 859-8000 (Persons Authorized to Receive Notices and Communications) January 14, 2005 ----------------------------------------- (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of ss.ss.240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. [ ] CUSIP NO. 087851309 13D PAGE 2 OF PAGES NAME OF REPORTING PERSON SS. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON 1 Appaloosa Investment Limited Partnership I CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |X| 2 (b) |_| 3 SEC USE ONLY SOURCE OF FUNDS 4 OO CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e) 5 N/A CITIZENSHIP OR PLACE OF ORGANIZATION 6 Delaware NUMBER OF 7 SOLE VOTING POWER SHARES -0- BENEFICIALLY 8 SHARED VOTING POWER OWNED BY 1,873,122 EACH 9 SOLE DISPOSITIVE POWER REPORTING -0- PERSON 10 SHARED DISPOSITIVE POWER WITH 1,873,122 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING PERSON 1,873,122 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES N/A 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 1.7% TYPE OF REPORTING PERSON 14 PN CUSIP NO. 087851309 13D PAGE 3 OF PAGES NAME OF REPORTING PERSON SS. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON 1 Palomino Fund Ltd. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |X| 2 (b) |_| 3 SEC USE ONLY SOURCE OF FUNDS 4 OO CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e) 5 N/A CITIZENSHIP OR PLACE OF ORGANIZATION 6 British Virgin Islands NUMBER OF 7 SOLE VOTING POWER SHARES -0- BENEFICIALLY 8 SHARED VOTING POWER OWNED BY 1,641,178 EACH 9 SOLE DISPOSITIVE POWER REPORTING -0- PERSON 10 SHARED DISPOSITIVE POWER WITH 1,641,178 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING PERSON 1,641,178 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES N/A 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 1.5% TYPE OF REPORTING PERSON 14 CO CUSIP NO. 087851309 13D PAGE 4 OF PAGES NAME OF REPORTING PERSON SS. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON 1 Appaloosa Management L.P. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |X| 2 (b) |_| 3 SEC USE ONLY SOURCE OF FUNDS 4 OO CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e) 5 N/A CITIZENSHIP OR PLACE OF ORGANIZATION 6 Delaware NUMBER OF 7 SOLE VOTING POWER SHARES -0- BENEFICIALLY 8 SHARED VOTING POWER OWNED BY 3,514,300 EACH 9 SOLE DISPOSITIVE POWER REPORTING -0- PERSON 10 SHARED DISPOSITIVE POWER WITH 3,514,300 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING PERSON 3,514,300 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES N/A 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 3.3% TYPE OF REPORTING PERSON 14 PN; IA CUSIP NO. 087851309 13D PAGE 5 OF PAGES NAME OF REPORTING PERSON SS. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON 1 Appaloosa Partners Inc. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |X| 2 (b) |_| 3 SEC USE ONLY SOURCE OF FUNDS 4 OO CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e) 5 N/A CITIZENSHIP OR PLACE OF ORGANIZATION 6 Delaware NUMBER OF 7 SOLE VOTING POWER SHARES -0- BENEFICIALLY 8 SHARED VOTING POWER OWNED BY 3,514,300 EACH 9 SOLE DISPOSITIVE POWER REPORTING -0- PERSON 10 SHARED DISPOSITIVE POWER WITH 3,514,300 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING PERSON 3,514,300 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES N/A 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 3.3% TYPE OF REPORTING PERSON 14 CO CUSIP NO. 087851309 13D PAGE 6 OF PAGES NAME OF REPORTING PERSON SS. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON 1 David A. Tepper CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |X| 2 (b) |_| 3 SEC USE ONLY SOURCE OF FUNDS 4 OO CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e) 5 N/A CITIZENSHIP OR PLACE OF ORGANIZATION 6 USA NUMBER OF 7 SOLE VOTING POWER SHARES -0- BENEFICIALLY 8 SHARED VOTING POWER OWNED BY 3,514,300 EACH 9 SOLE DISPOSITIVE POWER REPORTING -0- PERSON 10 SHARED DISPOSITIVE POWER WITH 3,514,300 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING PERSON 3,514,300 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES N/A 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 3.3% TYPE OF REPORTING PERSON 14 IN; HC CUSIP NO. 087851309 13D PAGE 7 OF PAGES NAME OF REPORTING PERSON SS. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON 1 Franklin Mutual Advisers, LLC CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |X| 2 (b) |_| 3 SEC USE ONLY SOURCE OF FUNDS 4 OO CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e) 5 N/A CITIZENSHIP OR PLACE OF ORGANIZATION 6 Delaware NUMBER OF 7 SOLE VOTING POWER SHARES 3,508,900 BENEFICIALLY 8 SHARED VOTING POWER OWNED BY -0- EACH 9 SOLE DISPOSITIVE POWER REPORTING 3,508,900 PERSON 10 SHARED DISPOSITIVE POWER WITH -0- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING PERSON 3,508,900 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES N/A 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 3.2% TYPE OF REPORTING PERSON 14 IA CUSIP NO. 087851309 13D PAGE 8 OF PAGES NAME OF REPORTING PERSON SS. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON 1 Northbrook NBV, LLC CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |X| 2 (b) |_| 3 SEC USE ONLY SOURCE OF FUNDS 4 WC CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e) 5 N/A CITIZENSHIP OR PLACE OF ORGANIZATION 6 Delaware NUMBER OF 7 SOLE VOTING POWER SHARES -0- BENEFICIALLY 8 SHARED VOTING POWER OWNED BY 1,487,200 EACH 9 SOLE DISPOSITIVE POWER REPORTING -0- PERSON 10 SHARED DISPOSITIVE POWER WITH 1,487,200 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING PERSON 1,487,200 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES N/A 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 1.4% TYPE OF REPORTING PERSON 14 OO CUSIP NO. 087851309 13D PAGE 9 OF PAGES NAME OF REPORTING PERSON SS. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON 1 David Hokin CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |X| 2 (b) |_| 3 SEC USE ONLY SOURCE OF FUNDS 4 OO CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e) 5 N/A CITIZENSHIP OR PLACE OF ORGANIZATION 6 USA NUMBER OF 7 SOLE VOTING POWER SHARES -0- BENEFICIALLY 8 SHARED VOTING POWER OWNED BY 1,487,200 EACH 9 SOLE DISPOSITIVE POWER REPORTING -0- PERSON 10 SHARED DISPOSITIVE POWER WITH 1,487,200 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING PERSON 1,487,200 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES N/A 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 1.4% TYPE OF REPORTING PERSON 14 IN; HC CUSIP NO. 087851309 13D PAGE 10 OF PAGES NAME OF REPORTING PERSON SS. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON 1 Rob Rubin CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |X| 2 (b) |_| 3 SEC USE ONLY SOURCE OF FUNDS 4 OO CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e) 5 N/A CITIZENSHIP OR PLACE OF ORGANIZATION 6 USA NUMBER OF 7 SOLE VOTING POWER SHARES -0- BENEFICIALLY 8 SHARED VOTING POWER OWNED BY 1,487,200 EACH 9 SOLE DISPOSITIVE POWER REPORTING -0- PERSON 10 SHARED DISPOSITIVE POWER WITH 1,487,200 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING PERSON 1,487,200 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES N/A 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 1.4% TYPE OF REPORTING PERSON 14 IN CUSIP NO. 087851309 13D PAGE 11 OF PAGES NAME OF REPORTING PERSON SS. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON 1 Robert Hartman CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |X| 2 (b) |_| 3 SEC USE ONLY SOURCE OF FUNDS 4 OO CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e) 5 N/A CITIZENSHIP OR PLACE OF ORGANIZATION 6 USA NUMBER OF 7 SOLE VOTING POWER SHARES -0- BENEFICIALLY 8 SHARED VOTING POWER OWNED BY 1,487,200 EACH 9 SOLE DISPOSITIVE POWER REPORTING -0- PERSON 10 SHARED DISPOSITIVE POWER WITH 1,487,200 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING PERSON 1,487,200 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES N/A 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 1.4% TYPE OF REPORTING PERSON 14 IN CUSIP NO. 087851309 13D PAGE 12 OF PAGES NAME OF REPORTING PERSON SS. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON 1 1995 David Reis Family Trust CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |X| 2 (b) |_| 3 SEC USE ONLY SOURCE OF FUNDS 4 OO CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e) 5 N/A CITIZENSHIP OR PLACE OF ORGANIZATION 6 Connecticut NUMBER OF 7 SOLE VOTING POWER SHARES -0- BENEFICIALLY 8 SHARED VOTING POWER OWNED BY 10,000 EACH 9 SOLE DISPOSITIVE POWER REPORTING -0- PERSON 10 SHARED DISPOSITIVE POWER WITH 10,000 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING PERSON 10,000 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES N/A 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) Less than 1.0% TYPE OF REPORTING PERSON 14 00 CUSIP NO. 087851309 13D PAGE 13 OF PAGES NAME OF REPORTING PERSON SS. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON 1 1995 Donna Reis Family Trust CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |X| 2 (b) |_| 3 SEC USE ONLY SOURCE OF FUNDS 4 OO CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e) 5 N/A CITIZENSHIP OR PLACE OF ORGANIZATION 6 Connecticut NUMBER OF 7 SOLE VOTING POWER SHARES -0- BENEFICIALLY 8 SHARED VOTING POWER OWNED BY 25,000 EACH 9 SOLE DISPOSITIVE POWER REPORTING -0- PERSON 10 SHARED DISPOSITIVE POWER WITH 25,000 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING PERSON 25,000 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES N/A 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) Less than 1.0% TYPE OF REPORTING PERSON 14 OO CUSIP NO. 087851309 13D PAGE 14 OF PAGES NAME OF REPORTING PERSON SS. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON 1 Aaron Reis Spray Trust CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |X| 2 (b) |_| 3 SEC USE ONLY SOURCE OF FUNDS 4 OO CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e) 5 N/A CITIZENSHIP OR PLACE OF ORGANIZATION 6 Connecticut NUMBER OF 7 SOLE VOTING POWER SHARES -0- BENEFICIALLY 8 SHARED VOTING POWER OWNED BY 20,000 EACH 9 SOLE DISPOSITIVE POWER REPORTING -0- PERSON 10 SHARED DISPOSITIVE POWER WITH 20,000 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING PERSON 20,000 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES N/A 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) Less than 1.0% TYPE OF REPORTING PERSON 14 OO CUSIP NO. 087851309 13D PAGE 15 OF PAGES NAME OF REPORTING PERSON SS. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON 1 Anna Reis Spray Trust CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |X| 2 (b) |_| 3 SEC USE ONLY SOURCE OF FUNDS 4 OO CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e) 5 N/A CITIZENSHIP OR PLACE OF ORGANIZATION 6 Connecticut NUMBER OF 7 SOLE VOTING POWER SHARES -0- BENEFICIALLY 8 SHARED VOTING POWER OWNED BY 22,500 EACH 9 SOLE DISPOSITIVE POWER REPORTING -0- PERSON 10 SHARED DISPOSITIVE POWER WITH 22,500 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING PERSON 22,500 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES N/A 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) Less than 1.0% TYPE OF REPORTING PERSON 14 OO CUSIP NO. 087851309 13D PAGE 16 OF PAGES NAME OF REPORTING PERSON SS. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON 1 Alexander Reis Spray Trust CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |X| 2 (b) |_| 3 SEC USE ONLY SOURCE OF FUNDS 4 OO CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e) 5 N/A CITIZENSHIP OR PLACE OF ORGANIZATION 6 Connecticut NUMBER OF 7 SOLE VOTING POWER SHARES -0- BENEFICIALLY 8 SHARED VOTING POWER OWNED BY 22,500 EACH 9 SOLE DISPOSITIVE POWER REPORTING -0- PERSON 10 SHARED DISPOSITIVE POWER WITH 22,500 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING PERSON 22,500 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES N/A 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) Less than 1.0% TYPE OF REPORTING PERSON 14 OO CUSIP NO. 087851309 13D PAGE 17 OF PAGES NAME OF REPORTING PERSON SS. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON 1 David Reis Family Trust CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |X| 2 (b) |_| 3 SEC USE ONLY SOURCE OF FUNDS 4 OO CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e) 5 N/A CITIZENSHIP OR PLACE OF ORGANIZATION 6 Connecticut NUMBER OF 7 SOLE VOTING POWER SHARES -0- BENEFICIALLY 8 SHARED VOTING POWER OWNED BY 22,500 EACH 9 SOLE DISPOSITIVE POWER REPORTING -0- PERSON 10 SHARED DISPOSITIVE POWER WITH 22,500 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING PERSON 22,500 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES N/A 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) Less than 1.0% TYPE OF REPORTING PERSON 14 OO CUSIP NO. 087851309 13D PAGE 18 OF PAGES NAME OF REPORTING PERSON SS. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON 1 David Reis CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |X| 2 (b) |_| 3 SEC USE ONLY SOURCE OF FUNDS 4 PF CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e) 5 N/A CITIZENSHIP OR PLACE OF ORGANIZATION 6 United States NUMBER OF 7 SOLE VOTING POWER SHARES 95,000 BENEFICIALLY 8 SHARED VOTING POWER OWNED BY 125,000 EACH 9 SOLE DISPOSITIVE POWER REPORTING 95,000 PERSON 10 SHARED DISPOSITIVE POWER WITH 125,000 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING PERSON 220,000 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES N/A 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) Less than 1.0% TYPE OF REPORTING PERSON 14 IN CUSIP NO. 087851309 13D PAGE 19 OF PAGES NAME OF REPORTING PERSON SS. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON 1 Baylor Enterprises LLC CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |X| 2 (b) |_| 3 SEC USE ONLY SOURCE OF FUNDS 4 AF CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e) 5 N/A CITIZENSHIP OR PLACE OF ORGANIZATION 6 Georgia NUMBER OF 7 SOLE VOTING POWER SHARES -0- BENEFICIALLY 8 SHARED VOTING POWER OWNED BY 22,000 EACH 9 SOLE DISPOSITIVE POWER REPORTING -0- PERSON 10 SHARED DISPOSITIVE POWER WITH 22,000 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING PERSON 22,000 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES N/A 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) Less than 1.0% TYPE OF REPORTING PERSON 14 OO CUSIP NO. 087851309 13D PAGE 20 OF PAGES NAME OF REPORTING PERSON SS. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON 1 Arnold M. Whitman CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |X| 2 (b) |_| 3 SEC USE ONLY SOURCE OF FUNDS 4 PF CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e) 5 N/A CITIZENSHIP OR PLACE OF ORGANIZATION 6 USA NUMBER OF 7 SOLE VOTING POWER SHARES 4,500 BENEFICIALLY 8 SHARED VOTING POWER OWNED BY 22,000 EACH 9 SOLE DISPOSITIVE POWER REPORTING 4,500 PERSON 10 SHARED DISPOSITIVE POWER WITH 22,000 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING PERSON 26,500 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES N/A 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) Less than 1% TYPE OF REPORTING PERSON 14 IN; HC Item 1. Security and Issuer This Statement on Schedule 13D (this "Statement") is filed with respect to common stock, $.10 par value per share ("Beverly Enterprises Shares"), of Beverly Enterprises, Inc., a Delaware corporation (the "Company"). The principal executive office of the Company is located at One Thousand Beverly Way, Fort Smith, Arkansas 72919. Item 2. Identity and Background This Statement is being filed by Appaloosa Investment Limited Partnership I ("AILP"), Palomino Fund Ltd. ("Palomino"), Appaloosa Management L.P. ("Appaloosa"), Appaloosa Partners Inc. ("API"), David A. Tepper, Franklin Mutual Advisers, LLC ("Franklin Mutual"), Northbrook NBV LLC ("Northbrook"), David Hokin, Rob Rubin, Robert Hartman, the 1995 David Reis Family Trust ("1995 DRF Trust"), the 1995 Donna Reis Family Trust ("Donna Trust"), the Aaron Reis Spray Trust ("Aaron Trust"), the Anna Reis Spray Trust ("Anna Trust"), the Alexander Reis Spray Trust ("Alexander Trust"), the David Reis Family Trust ("DRF Trust"), David Reis, Baylor Enterprises LLC ("Baylor") and Arnold M. Whitman (collectively, the "Filing Persons"). The Filing Persons have entered into a Joint Filing Agreement, dated as of January 24, 2004, a copy of which is attached hereto as Exhibit A. API is a Delaware corporation and the sole general partner of Appaloosa, a Delaware limited partnership. Mr. Tepper is the sole stockholder and sole director of API and is a U.S. citizen. Mr. Tepper's present principal employment is as President of API. Ronald Goldstein is the Secretary of API, and his present principal employment is as Vice President of API ("Mr. Goldstein"). Lawrence O'Friel's present principal employment is as treasurer of API ("Mr. O'Friel" and, together with Mr. Goldstein, the "API Officers"). Each of the API Officers is a citizen of the United States and disclaims beneficial ownership of any of the securities covered by this Statement. Appaloosa is the sole general partner of AILP, a Delaware limited partnership, and Appaloosa makes all investment decisions for Palomino as its investment adviser. AILP and Palomino are referred to herein collectively as the "Appaloosa Purchasers." Palomino has no executive officers, and its directors are as follows: Mr. Tepper, Ernest Morrison ("Mr. Morrison"), and Graham Cook ("Mr. Cook" and, together with Mr. Morrison, the "Palomino Directors"). Mr. Morrison and Mr. Cook are each citizens of the United Kingdom. Mr. Morrison's present principal employment is as a partner of the law firm Cox Hallett Wilkinson. Mr. Cook's present principal employment is as Managing Director of TMF (BVI) Limited and as Managing Director of Bison Financial Services Limited. Each of the Palomino Directors disclaims beneficial ownership of any of the securities covered by this Statement. The address of the principal business and/or principal office of each of AILP, Appaloosa, API, Mr. Tepper and the API Officers is c/o API, 26 Main Street, 1st Floor, Chatham, New Jersey 07928. The address of the principal business and principal office of Palomino is c/o Trident Trust Company (Cayman) Ltd., 1 Capital Place, P.O. Box 847, Grand Cayman, Cayman Islands. Mr. Morrison's principal business address at Cox Hallett Wilkinson is Milner House, 18 Parliament Street, Hamilton, Bermuda. Mr. Cook's principal business address at TMF (BVI) Limited is Mill Mall P.O. Box 964, Road Town, Tortola, British Virgin Islands, and at Bison Financial Services Limited, his principal business address is Bison Court, Yamraj Building, Road Town, Tortola, British Virgin Islands. Franklin Mutual is a limited liability company organized under the laws of Delaware, and its principal business is as an investment adviser registered with the U.S. Securities and Exchange Commission ("SEC") and investment adviser to certain investment companies within the Franklin/Templeton Group of Fund, including Franklin Mutual Series Fund Inc. Franklin Mutual's principal business address is 51 John F. Kennedy Parkway, Short Hills, New Jersey 07078. The names, addresses, principal occupations and citizenship of each executive officer and director and each controlling person, if any, of Franklin Mutual are set forth in Exhibit B attached hereto. Northbrook is a limited liability company organized under the laws of Delaware, and its principal business is general investment activities. Each of Messrs. Hokin, Hartman and Rubin is a Manager of Northbrook, and Mr. Hokin is the controlling member. Mr. Hokin's principal employment is as Chief Strategist for DH2, Inc., an Illinois corporation ("DH2"). Mr. Rubin's principal employment is as Managing Director for DH2, whose principal business is investment and advisory services. Mr. Hartman's principal employment is as Chairman of Nucare Services Corp, an Illinois corporation ("Nucare"), whose principal business is healthcare management. The business address of each of Northbrook, DH2 and Messrs Hokin and Rubin is 500 Skokie Boulevard, Suite 310, Northbrook, Illinois 60062. The business address of each of Nucare and Mr. Hartman is 6633 N. Lincoln Ave., Lincolnwood, Illinois, 60712. Each of Messrs Hokin, Hartman and Rubin is a U.S. citizen. Each of the 1995 DRF Trust, Donna Trust, Aaron Trust, Anna Trust, Alexander Trust and DRF Trust (together, the "Reis Trusts") is a personal, discretionary family trust formed under the laws of Connecticut. Pursuant to the trust agreements under which each Reis Trust was formed, the trustee is authorized to make any investment of its trust fund which the trustee considers to be in the best interests of the beneficiaries. None of the Reis Trusts carries on business but holds property, including 200,000 Beverly Enterprises Shares in the aggregate. The records of each Reis Trust are held at, and the mailing address of each Reis Trust is, 19 Hilltop Place, Rye, NY 10580. David Reis is a trustee of each of the Reis Trusts and serves as Managing Member of Senior Care Development, LLC, a limited liability company organized under the laws of Connecticut. His principal business address is 19 Post Road East Westport, CT 06880. Mr. Reis is a U.S. citizen. Baylor is a limited liability company organized under the laws of Georgia, and its principal business is holding selected securities. Baylor's principal business address is c/o Formation Capital, LLC, 1035 Powers Place, Alpharetta, GA 30004. Arnold M. Whitman is the controlling member of Baylor and serves as Chief Executive Officer, Treasurer and Co-Chairman of Formation Capital, LLC ("Formation"), a limited liability company organized under the laws of Pennsylvania to invest in companies in the senior housing and long-term care industry. Mr. Whitman's principal business address is c/o Formation Capital, LLC, 1035 Powers Place, Alpharetta, GA 30004. Mr. Whitman is a U.S. citizen. During the last five years, none of the Filing Persons, Formation, the API Officers, the Palomino Directors or any of the executive officers listed in Exhibit B attached hereto has been (i) convicted in a criminal proceeding (excluding traffic violations and similar misdemeanors), or (ii) a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of or prohibiting or mandating activities subject to federal or state securities laws or finding any violation with respect to such laws. Item 3. Source and Amount of Funds or Other Consideration The Beverly Enterprises Shares reported herein by the Appaloosa Purchasers were acquired with funds of approximately $30,590,227.19 (including brokerage commissions). All of such funds were provided from investment capital of each Appaloosa Purchaser. The Beverly Enterprises Shares reported herein by Franklin Mutual were acquired with funds of approximately $31,446,000 (including brokerage commissions). All of such funds were provided from investment capital of Franklin Mutual's respective advisory clients. The Beverly Enterprises Shares reported herein by Northbrook were acquired with funds of approximately $13,344,744.62 (including brokerage commissions). All of such funds were provided from Northbrook's working capital. The Beverly Enterprises Shares reported herein by each of the Reis Trusts were acquired with funds (including brokerage commissions) of approximately $89,000 for the 1995 DRF Trust, $209,224 for the Donna Trust, $161,266 for the Aaron Trust, $183,373.97 for the Anna Trust, $183,374 for the Alexander Trust, $205,616 for the DRF Trust, and the Beverly Enterprises Shares reported herein by Mr. Reis in his personal capacity were acquired with funds of approximately $610,557. All of such funds were provided to each of the Reis Trusts from earnings accumulated, in or contributions to, the general trust corpus, and the funds provided to David Reis in his personal capacity were contributed by Mr. Reis through his personal funds. The Beverly Enterprises Shares reported herein by Baylor were acquired with funds of approximately $198,019.80 (excluding brokerage commissions). All of such funds were provided from a capital contribution from Baylor's controlling member, Arnold M. Whitman. The Beverly Enterprises Shares reported herein by Mr. Whitman in his personal capacity were acquired with funds of approximately $40,511.45 (including brokerage commissions). All of such funds were provided from Mr. Whitman's own personal funds. Item 4. Purpose of Transaction The Filing Persons acquired the Beverly Enterprises Shares reported in Item 5 of this Statement in order to increase their equity interest in the Company, which the Filing Persons believe is an attractive investment. The Filing Persons are interested in exploring the possibility of a negotiated transaction with the Company that would involve acquiring control of the Company or purchasing its real estate assets and nursing facilities operations (the "SNFs"). In this regard, during the week of December 13, 2004, Mr. Whitman discussed the possibility of such a transaction with William R. Floyd, the Chairman of the Board, President and Chief Executive Officer of the Company. On December 22, 2004, Formation sent a follow-up letter, a copy of which is attached hereto as Exhibit D (the "December 22 Letter"), to Mr. Floyd, expressing its interest in acquiring the issued and outstanding Beverly Enterprises Shares subject to completion of Formation's due diligence review of the Company and execution of definitive agreements and stating that it was prepared to immediately commence due diligence review of the Company. In this letter, Formation also stated that the terms of the letter were only intended as an outline of certain material terms of the proposed transaction and were not intended to be binding on the Company or Formation and, moreover, that they did not include all the material terms, conditions, covenants, representations, warranties and other provisions that would be contained in a definitive agreement and other documentation. On January 5, 2005, the Company responded to Formation's December 22 Letter in a letter, a copy of which is attached hereto as Exhibit E (the "January 5 Letter"), indicating that the Company had shared the December 22 Letter with its Board of Directors which had engaged advisors to assist it in evaluating Formation's indication of interest. On or about January 13, 2005, Mr. Whitman responded to the January 5 Letter and discussed further with Mr. Floyd Formation's indication of interest. On January 19, 2005, Formation expanded on its proposal as initially set forth in the December 22 Letter in a letter to the Company, a copy of which is attached hereto as Exhibit F (the "January 19 Letter"), and reiterated the non-binding nature of the proposed transaction on the Company and Formation. The Filing Persons, Formation, any of the API Officers and Palomino Directors or persons named in Exhibit B may also acquire additional Beverly Enterprises Shares in the open market, in privately negotiated transactions, or otherwise, and may contact the Company, its representatives or other persons interested in the Company, for the purpose of discussing the Company and the matters referred to in the December 22 Letter, January 5 Letter and January 19 Letter. The Filing Persons reserve the right at any time (ii) to modify or withdraw their proposal as set forth in the December 22 Letter and January 19 Letter, (ii) to terminate their acting as a group in respect of the Beverly Enterprises Shares and (iii) to dispose of some or all of their Beverly Enterprises Shares in the open market or in privately negotiated transactions to third parties, or otherwise, depending on the market conditions and other factors. Although the foregoing represents the range of activities presently contemplated by the Filing Persons and Formation with respect to the Beverly Enterprises Shares, it should be noted that the possible activities of the Filing Persons and Formation are subject to change at any time. In particular, any one or more Filing Persons (and their respective affiliates) reserves the right, in each case subject to any applicable limitations imposed on the sale of any of their Beverly Enterprises Shares by the Securities Act of 1933, as amended, and the rules promulgated thereunder, to distribute or cause to be distributed Beverly Enterprises Shares in kind to its limited partners, members or investors, as the case may be, or to the limited partners, members or investors of one or more Filing Persons controlled by it. Item 5. Interest in Securities of the Issuer (a) The Filing Persons beneficially own, as defined in Rule 13d-3 under the Securities Exchange Act of 1934 (the "1934 Act"), 8,756,900 Beverly Enterprises Shares in the aggregate. Based on the number of Beverly Enterprises Shares reported as outstanding by the Company in recent public filings, the Filing Persons beneficially own approximately 8.1% of the Beverly Enterprises Shares as calculated pursuant to Rule 13d-3(d)(1)(i): (i) AILP is the owner of 1,873,122 Beverly Enterprises Shares (or 1.7% of the outstanding Beverly Enterprises Shares). Each Filing Person (other than AILP, Palomino, Appaloosa, API and Mr. Tepper) disclaims beneficial ownership of AILP's Beverly Enterprises Shares; (ii) Palomino is the owner of 1,641,178 Beverly Enterprises Shares (or 1.5% of the outstanding Beverly Enterprises Shares). Each Filing Person (other than AILP, Palomino, Appaloosa, API and Mr. Tepper) disclaims beneficial ownership of Palomino's Beverly Enterprises Shares; (iii) each of Appaloosa, API, and Mr. Tepper, by virtue of their relationships to the Appaloosa Purchasers as described in Item 2 above, may be deemed to be a beneficial owner of 3,514,300 Beverly Enterprises Shares in the aggregate (or 3.3% of the outstanding Beverly Enterprises Shares). None of the API Officers and Palomino Directors owns, and each disclaims beneficial ownership of, any of the Beverly Enterprises Shares covered by this Statement. Each Filing Person (other than AILP, Palomino, Appaloosa, API and Mr. Tepper) disclaims beneficial ownership of the Beverly Enterprises Shares owned by Appaloosa, API, and Mr. Tepper; (iv) Advisory clients of Franklin Mutual are the owners, in the aggregate, of 3,508,900 Beverly Enterprises Shares under investment advisory contracts that grant to Franklin Mutual sole voting and investment discretion over such shares. Therefore, Franklin Mutual may be deemed to be, for purposes of Rule 13d-3 under the 1934 Act, the beneficial owner of 3,508,900 Beverly Enterprises Shares, representing approximately 3.2% of the outstanding Beverly Enterprises Shares. Franklin Mutual is an indirect wholly owned subsidiary of Franklin Resources, Inc., a Delaware corporation ("FRI"). Beneficial ownership by investment advisory subsidiaries and other affiliates of FRI is being reported in conformity with the guidelines articulated by the SEC staff in Release No. 34-39538 (January 12, 1998) relating to organizations, such as FRI, where related entities exercise voting and investment powers over the securities being reported independently from each other. The voting and investment powers held by Franklin Mutual are exercised independently from FRI, and from all other investment advisor subsidiaries of FRI (FRI, its affiliates and investment advisor subsidiaries other than Franklin Mutual are collectively referred to herein as "FRI affiliates"). Furthermore, Franklin Mutual and FRI internal policies and procedures establish informational barriers that prevent the flow between Franklin Mutual and the FRI affiliates of information that relates to the voting and investment powers over the securities owned by their respective advisory clients. Consequently, Franklin Mutual and the FRI affiliates are each reporting the securities over which they hold investment and voting power separately from each other. Charles B. Johnson and Rupert H. Johnson, Jr. (the "Principal FRI Shareholders") each owns in excess of 10% of the outstanding common stock of FRI and are the principal shareholders of FRI. However, Franklin Mutual exercises voting and investment powers on behalf of its advisory clients independently of FRI, the Principal FRI Shareholders, and their respective affiliates. Consequently, beneficial ownership of the securities being reported by Franklin Mutual, including the Beverly Enterprises Shares being reported herein, is not attributed to FRI, the Principal FRI Shareholders, and their respective affiliates other than Franklin Mutual. Franklin Mutual disclaims any economic interest or beneficial ownership in any of the Beverly Enterprises Shares that may be beneficially owned by FRI or its other affiliates. Furthermore, FRI, the Principal FRI Shareholders, and their respective affiliates, including Franklin Mutual, are of the view that they are not acting as a "group" for purposes of Section 13(d) under the 1934 Act and that they are not otherwise required to attribute to each other the "beneficial ownership" of securities held by any of them or by any persons or entities advised by FRI subsidiaries. Each other Filing Person disclaims beneficial ownership of the Beverly Enterprises Shares owned by Franklin Mutual; (v) Northbrook owns 1,487,200 Beverly Enterprises Shares which represent approximately 1.4% of the outstanding Beverly Enterprises Shares. Each of Messrs. Hartman and Rubin, in their capacities as Managers of Northbrook as disclosed in Item 2, may be deemed to have beneficial ownership of the 1,487,200 Beverly Enterprises Shares owned by Northbrook, and each of Messrs. Hokin, Hartman and Rubin disclaims beneficial ownership of such shares. Mr. Hokin, in his capacity as Manager and controlling member of Northbrook, may be deemed to be a beneficial owner of the Beverly Enterprises Shares owned by Northbrook. Each Filing Person (other than Northbrook) disclaims beneficial ownership of the Beverly Enterprises Shares owned by Northbrook; (vi) the 1995 DRF Trust is the owner of 10,000 Beverly Enterprises Shares (or less than 1.0% of the outstanding Beverly Enterprises Shares). Each Filing Person (other than Mr. Reis and each of the Reis Trusts) disclaims beneficial ownership of the Beverly Enterprises Shares owned by the 1995 DRF Trust; (vii) the Donna Trust is the owner of 25,000 Beverly Enterprises Shares (or less than 1.0% of the outstanding Beverly Enterprises Shares). Each Filing Person (other than Mr. Reis and each of the Reis Trusts) disclaims beneficial ownership of the Beverly Enterprises Shares owned by the Donna Trust; (viii) the Aaron Trust is the owner of 20,000 Beverly Enterprises Shares (or less than 1.0% of the outstanding Beverly Enterprises Shares). Each Filing Person (other than Mr. Reis and each of the Reis Trusts) disclaims beneficial ownership of the Beverly Enterprises Shares owned by the Aaron Trust; (ix) the Anna Trust is the owner of 22,500 Beverly Enterprises Shares (or less than 1.0% of the outstanding Beverly Enterprises Shares). Each Filing Person (other than Mr. Reis and each of the Reis Trusts) disclaims beneficial ownership of the Beverly Enterprises Shares owned by the Anna Trust; (x) the Alexander Trust is the owner of 22,500 Beverly Enterprises Shares (or less than 1.0% of the outstanding Beverly Enterprises Shares). Each Filing Person (other than Mr. Reis and each of the Reis Trusts) disclaims beneficial ownership of the Beverly Enterprises Shares owned by the Alexander Trust; (xi) the DRF Trust is the owner of 25,000 Beverly Enterprises Shares (or less than 1.0% of the outstanding Beverly Enterprises Shares). Each Filing Person (other than Mr. Reis and each of the Reis Trusts) disclaims beneficial ownership of the Beverly Enterprises Shares owned by the DRF Trust; (xii) Mr. David Reis, in his personal capacity, has beneficial ownership of 95,000 Beverly Enterprise Shares (or less than 1.0% of the outstanding Beverly Enterprises Shares and of which 20,000 are subject to call options) and, by virtue of his status as trustee of each of the Reis Trusts, may be deemed to share beneficial ownership of 125,000 Beverly Enterprises Shares held directly in the aggregate by the Reis Trusts (or less than 1.0% of the outstanding Beverly Enterprises Shares). Each Filing Person (other than Mr. Reis) disclaims beneficial ownership of the 95,000 Beverly Enterprises Shares owned by Mr. Reis, and each Filing Person (other than Mr. Reis and each Reis Trust) disclaims beneficial ownership of the 125,000 Beverly Enterprises Shares held directly in the aggregate by the Reis Trusts, which Mr. Reis may be deemed to own by virtue of his status as trustee to the Reis Trusts; (xiii) Baylor is the owner of 22,000 Beverly Enterprises Shares (or less than 1% of the outstanding Beverly Enterprises Shares). Each Filing Person (other than Baylor and Mr. Whitman) disclaims beneficial ownership of the Beverly Enterprises Shares owned by Baylor; (xiv) Mr. Arnold M. Whitman has sole beneficial ownership of 4,500 Beverly Enterprises Shares (or less than 1% of the outstanding Beverly Enterprises Shares) and, solely by virtue of his controlling interest in Baylor, may be deemed to share beneficial ownership of 26,500 Beverly Enterprises Shares with Baylor in the aggregate (or less than 1% of the outstanding Beverly Enterprises Shares). Each Filing Person (other than Mr. Whitman) disclaims beneficial ownership of the 4,500 Beverly Enterprises Shares owned by Mr. Whitman in his personal capacity, and each Filing Person (other than Mr. Whitman and Baylor) disclaims beneficial ownership of the 22,000 Beverly Enterprises Shares held directly by Baylor, which Mr. Whitman may be deemed to own by virtue of his controlling interest in Baylor; and (xv) Formation does not own any of the aggregate 1,733,700 Beverly Enterprises Shares (or less than 1.0% of the outstanding Beverly Enterprises Shares) beneficially owned by Northbrook, Messrs Hokin, Rubin and Hartman, any of the Reis Trusts, Mr. Reis, Baylor and Mr. Whitman and disclaims beneficial ownership of such shares. By virtue of the Term Sheet, filed as Exhibit G to this Statement, and the Joint Filing Agreement, filed as Exhibit H to this Statement, each as described in Item 6 below, the Filing Persons may be deemed to be members of a group as defined in Rule 13d-5(b) and share beneficial ownership of the aggregate 8,756,900 Beverly Enterprises Shares reported herein. (b) By virtue of the relationships described in Item 2, the Appaloosa Purchasers, Appaloosa, API and Mr. Tepper have shared power to vote and direct the disposition of the Beverly Enterprises Shares beneficially owned by them (as defined in Rule 13d-3 under the 1934 Act). Franklin Mutual has the sole power to vote and direct the disposition of the Beverly Enterprises Shares it holds. By virtue of Messrs Hokin, Hartman and Rubin's relationship to Northbrook as described in Item 2, Northbrook and Messrs Hokin, Hartman and Rubin have shared power to vote and direct the disposition of the Beverly Enterprises Shares held by Northbrook. By virtue of the relationships described in Item 2, the Reis Trusts and Mr. Reis have shared power to vote and direct the disposition of the 125,000 Beverly Enterprises Shares held by such trusts, and Mr. Reis has the sole power to vote and direct the disposition of the 75,000 Beverly Enterprises Shares held by him in his personal capacity. By virtue of Mr. Whitman's controlling interest in Baylor as described in Item 2, Baylor and Mr. Whitman have shared power to vote and direct the disposition of the 22,000 Beverly Enterprises Shares held by Baylor, and Mr. Whitman has the sole power to vote and direct the disposition of 4,500 Beverly Enterprises Shares held by himself. .(c) Exhibit C sets forth the purchases of Beverly Enterprises Shares effected by any Filing Person, Formation, any API Officer or Palomino Director or any person named in Exhibit B during the past 60 days. All of such purchases were effected by the Filing Persons on the New York Stock Exchange. (d) Other than the Filing Persons and any person named in Exhibit B, no person is known by any Filing Person to have the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, any Beverly Enterprises Shares beneficially owned by the Filing Persons or other person named in Exhibit B. (e) Not applicable. Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer. On December 14, 2004, Appaloosa, Eureka Capital Markets, LLC, financial advisor to the Filing Persons in connection with the Transaction ("Eureka"), Formation and Franklin Mutual (the "Consortium Members") executed a term sheet setting forth the terms by which they would work together to effect a transaction acquiring the outstanding Beverly Enterprises Shares or the SNFs. Pursuant to this term sheet, Appaloosa, Franklin Mutual and Formation would make an aggregate equity contribution of $375 million to an entity newly formed by Formation, consisting of $150 million from Appaloosa, $175 million from Franklin Mutual and $50 million from Formation. In addition, the term sheet provides for the division of profits and losses and payment of fees and expenses among the Consortium Members. The description of this term sheet is qualified in its entirety by reference to the term sheet dated December 14, 2004 filed as Exhibit G attached hereto and incorporated herein by reference. On January 24, 2005, the Filing Persons and Formation (the "Parties"), entered into a letter agreement to ensure the coordinated supply of information necessary for the timely filing of a Schedule 13D by such members in acknowledgement that the Consortium Members and their affiliates may be deemed to have formed a "group" (within the meaning of Section 13(d)(3) of the 1934 Act). Pursuant to this letter agreement, each Party is required, among other things, to notify the other members promptly of each purchase or sale of Beverly Enterprises Shares and any agreements, contracts, arrangements, understandings, plans or proposals entered into by it or its affiliates that are required to be disclosed under Item 7 of Schedule 13D. The description of this letter agreement is qualified in its entirety by reference to the letter agreement dated January 24, 2005 filed as Exhibit H hereto and incorporated herein by reference. Item 7. Material to be Filed as Exhibits A. Joint Filing Agreement dated as of January 24, 2005. B. Executive Officers of Franklin Mutual. C. Transactions in Beverly Enterprises Shares Since November 18, 2004. D. Letter dated December 22, 2004 from Formation to the Company. E. Letter dated January 5, 2005 from the Company to Formation. F. Letter dated January 19, 2005 from Formation to the Company. G. Term Sheet dated December 14, 2004. H. Agreement among Stockholders dated as of January 24, 2005. SIGNATURE After reasonable inquiry and to the best of our knowledge and belief, the Reporting Person certifies that the information set forth in this statement is true, complete and correct. Dated: January 24, 2005 APPALOOSA INVESTMENT LIMITED PARTNERSHIP I By: Appaloosa Management L.P., its General Partner By: Appaloosa Partners Inc., its General Partner By: ------------------------- Name: David A. Tepper Title: President SIGNATURE After reasonable inquiry and to the best of our knowledge and belief, the Reporting Person certifies that the information set forth in this statement is true, complete and correct. Dated: January 24, 2005 PALOMINO FUND LTD. By: Appaloosa Management L.P., its Investment Adviser By: Appaloosa Partners Inc., its General Partner By: ------------------------- Name: David A. Tepper Title: President SIGNATURE After reasonable inquiry and to the best of our knowledge and belief, the Reporting Person certifies that the information set forth in this statement is true, complete and correct. Dated: January 24, 2005 APPALOOSA MANAGEMENT L.P. By: Appaloosa Partners Inc., its General Partner By: ------------------------- Name: David A. Tepper Title: President SIGNATURE After reasonable inquiry and to the best of our knowledge and belief, the Reporting Person certifies that the information set forth in this statement is true, complete and correct. Dated: January 24, 2005 APPALOOSA PARTNERS INC. By: ------------------------- Name: David A. Tepper Title: President SIGNATURE After reasonable inquiry and to the best of our knowledge and belief, the Reporting Person certifies that the information set forth in this statement is true, complete and correct. Dated: January 24, 2005 ------------------------------- DAVID A. TEPPER SIGNATURE After reasonable inquiry and to the best of our knowledge and belief, the Reporting Person certifies that the information set forth in this statement is true, complete and correct. Dated: January 24, 2005 Franklin Mutual Advisers, LLC By: ------------------------ Name: David J. Winters Title: President, Chief Executive Officer and Chief Investment Officer SIGNATURE After reasonable inquiry and to the best of our knowledge and belief, the Reporting Person certifies that the information set forth in this statement is true, complete and correct. Dated: January 24, 2005 NORTHBROOK NBV, LLC By: ------------------------ Name: Title: SIGNATURE After reasonable inquiry and to the best of our knowledge and belief, the Reporting Person certifies that the information set forth in this statement is true, complete and correct. Dated: January 24, 2005 ------------------------------- DAVID HOKIN SIGNATURE After reasonable inquiry and to the best of our knowledge and belief, the Reporting Person certifies that the information set forth in this statement is true, complete and correct. Dated: January 24, 2005 ------------------------------- ROB RUBIN SIGNATURE After reasonable inquiry and to the best of our knowledge and belief, the Reporting Person certifies that the information set forth in this statement is true, complete and correct. Dated: January 24, 2005 ------------------------------- ROBERT HARTMAN SIGNATURE After reasonable inquiry and to the best of our knowledge and belief, the Reporting Person certifies that the information set forth in this statement is true, complete and correct. Dated: January 24, 2005 1995 David Reis Family Trust By: ------------------------------- Name: David Reis Title: Trustee SIGNATURE After reasonable inquiry and to the best of our knowledge and belief, the Reporting Person certifies that the information set forth in this statement is true, complete and correct. Dated: January 24, 2005 1995 DONNA Reis Family Trust By: ------------------------------- Name: David Reis Title: Trustee SIGNATURE After reasonable inquiry and to the best of our knowledge and belief, the Reporting Person certifies that the information set forth in this statement is true, complete and correct. Dated: January 24, 2005 AARON REIS SPRAY TRUST By: ------------------------------- Name: David Reis Title: Trustee SIGNATURE After reasonable inquiry and to the best of our knowledge and belief, the Reporting Person certifies that the information set forth in this statement is true, complete and correct. Dated: January 24, 2005 ANNA REIS SPRAY TRUST By: ------------------------------- Name: David Reis Title: Trustee SIGNATURE After reasonable inquiry and to the best of our knowledge and belief, the Reporting Person certifies that the information set forth in this statement is true, complete and correct. Dated: January 24, 2005 ALEXANDER REIS SPRAY TRUST By:_______________________________ Name: David Reis Title: Trustee SIGNATURE After reasonable inquiry and to the best of our knowledge and belief, the Reporting Person certifies that the information set forth in this statement is true, complete and correct. Dated: January 24, 2005 DAVID REIS FAMILY TRUST By:_______________________________ Name: David Reis Title: Trustee SIGNATURE After reasonable inquiry and to the best of our knowledge and belief, the Reporting Person certifies that the information set forth in this statement is true, complete and correct. Dated: January 24, 2005 ------------------------------- DAVID REIS SIGNATURE After reasonable inquiry and to the best of our knowledge and belief, the Reporting Person certifies that the information set forth in this statement is true, complete and correct. Dated: January 24, 2005 BAYLOR ENTERPRISES LLC By:_______________________________ Name: Arnold M. Whitman Title: Managing Member SIGNATURE After reasonable inquiry and to the best of our knowledge and belief, the Reporting Person certifies that the information set forth in this statement is true, complete and correct. Dated: January 24, 2005 ------------------------------- ARNOLD M. WHITMAN EXHIBIT INDEX EXHIBIT NAME A. Joint Filing Agreement dated January 24, 2005. B. Executive Officers of Franklin Mutual. C. Transactions in Beverly Enterprises Shares Since November 18, 2004. D. Letter dated December 22, 2004 from Formation to the Company. E. Letter dated January 5, 2005 from the Company to Formation. F. Letter dated January 19, 2005 from Formation to the Company. G. Term Sheet dated December 14, 2004. H. Agreement Among Shareholders dated January 24, 2005. EX-99.A 2 dgex99a.txt Exhibit A JOINT FILING AGREEMENT The undersigned hereby agree that the Statement on Schedule 13D filed herein (and any amendments thereto), relating to the common stock, $0.10 par value, of Beverly Enterprises, Inc., is being filed jointly with the Securities and Exchange Commission pursuant to Rule 13d-1(k)(1) under the Securities Exchange Act of 1934, as amended, on behalf of each such person. Dated: January 24, 2005 APPALOOSA INVESTMENT LIMITED PARTNERSHIP I By: APPALOOSA MANAGEMENT L.P., Its General Partner By: APPALOOSA PARTNERS INC., Its General Partner By: /s/ David A. Tepper -------------------------------- Name: David A. Tepper Title: President PALOMINO FUND LTD. By: APPALOOSA MANAGEMENT L.P., Its Investment Adviser By: APPALOOSA PARTNERS INC., Its General Partner By: /s/ David A. Tepper -------------------------------- Name: David A. Tepper Title: President APPALOOSA MANAGEMENT L.P. By: APPALOOSA PARTNERS INC., Its General Partner By: /s/ David A. Tepper ------------------------------------- Name: David A. Tepper Title: President APPALOOSA PARTNERS INC. By: /s/ David A. Tepper ------------------------------------------ Name: David A. Tepper Title: President /s/ David A. Tepper ---------------------------------------------- David A. Tepper FRANKLIN MUTUAL ADVISERS, LLC By: /s/ David J. Winters ------------------------------------------ Name: David J. Winters Title: President, Chief Executive Officer and Chief Investment Officer NORTHBROOK NBV, LLC By: /s/ Rob Rubin ------------------------------------------- Name: Rob Rubin Title: Manager /s/ David Hokin ---------------------------------------------- DAVID HOKIN /s/ Rob Rubin ---------------------------------------------- ROB RUBIN /s/ Robert Hartman ---------------------------------------------- ROBERT HARTMAN 1995 DAVID REIS FAMILY TRUST By:/s/ David Reis ------------------------------------------- Name: David Reis Title: Trustee 1995 DONNA REIS FAMILY TRUST By:/s/ David Reis ------------------------------------------- Name: David Reis Title: Trustee AARON REIS SPRAY TRUST By:/s/ David Reis ------------------------------------------- Name: David Reis Title: Trustee ANNA REIS SPRAY TRUST By:/s/ David Reis ------------------------------------------- Name: David Reis Title: Trustee ALEXANDER REIS SPRAY TRUST By:/s/ David Reis ------------------------------------------- Name: David Reis Title: Trustee DAVID REIS FAMILY TRUST By:/s/ David Reis ------------------------------------------- Name: David Reis Title: Trustee /s/ David Reis ---------------------------------------------- DAVID REIS BAYLOR ENTERPRISES LLC By:/s/ Arnold M. Whitman ------------------------------------------- Name: Arnold M. Whitman Title: Managing Member /s/ Arnold M. Whitman ---------------------------------------------- ARNOLD M. WHITMAN EX-99.B 3 dgex99b.txt Exhibit B EXECUTIVE OFFICERS OF FRANKLIN MUTUAL ADVISERS, LLC Each of the individuals named below is a citizen of the United States with a principal business address as indicated below. ------------------------- ------------------------- ------------------------- NAME PRINCIPAL OCCUPATION ADDRESS ------------------------- ------------------------- ------------------------- Michael Embler Senior Vice President Short Hills (1) ------------------------- ------------------------- ------------------------- Martin L. Flanagan Senior Vice President and San Mateo (2) Chief Financial Officer ------------------------- ------------------------- ------------------------- Barbara J. Green Secretary San Mateo (2) ------------------------- ------------------------- ------------------------- Ephraim Karpel Vice President - Trading Short Hills (1) ------------------------- ------------------------- ------------------------- Charles R. Sims Treasurer San Mateo (2) ------------------------- ------------------------- ------------------------- Bradley Takahashi Vice President Short Hills (1) ------------------------- ------------------------- ------------------------- David Winters President, Chief Executive Short Hills (1) Officer and Chief Investment Officer ------------------------- ------------------------- ------------------------- Timothy S. Stearns Chief Compliance Officer Ft. Lauderdale (3) ------------------------- ------------------------- ------------------------- (1) Franklin Mutual Advisers, LLC, 51 John F. Kennedy Parkway, Short Hills, NJ. An investment adviser registered with the U.S. Securities and Exchange Commission and investment adviser to the Franklin Mutual Series Fund Inc. (2) Franklin Resources, Inc., One Franklin Parkway, San Mateo, CA 94403. Parent Company of Franklin/Templeton Distributors, Inc. (the Parent Company of Franklin Mutual Advisers, LLC) and a number of investment advisers and administrative companies providing investment advice and administrative services to the Franklin/Templeton Group of Funds, Franklin Mutual Series Fund Inc., managed accounts and other investment products. (3) Franklin Resources, Inc., 500 E. Broward Blvd., Ft. Lauderdale, FL 33394. EX-99.C 4 dgex99c.txt Exhibit C TRANSACTIONS IN BEVERLY ENTERPRISES SHARES SINCE NOVEMBER 18, 2004 The transactions in Beverly Enterprises Shares by any Filing Person, Formation, any API Officer or Palomino Director or any person listed on Exhibit B attached hereto are listed below with (unless otherwise noted) the dates of the transaction, amount of shares purchased and approximate price per share (including commissions), if any: Date of Amount of Buy/Sell Price Per Transaction Shares Share or Option AILP January 7, 2005 73,074 Buy 8.9341 January 13, 2005 68,224 Buy 8.6452 January 14, 2005 87,945 Buy 9.0330 January 18, 2005 213,200 Buy 9.2586 January 19, 2005 213,200 Buy 9.5761 January 20, 2005 139,433 Buy 9.6044 January 21, 2005 39,229 Buy 9.5893 January 24, 2005 45,891 Buy 9.5302 Palomino January 7, 2005 64,026 Buy 8.9341 January 13, 2005 59,776 Buy 8.6452 January 14, 2005 77,055 Buy 9.0330 January 18, 2005 186,800 Buy 9.2586 January 19, 2005 186,800 Buy 9.5761 January 20, 2005 122,167 Buy 9.6044 January 21, 2005 34,371 Buy 9.5893 January 24, 2005 40,209 Buy 9.5302 Appaloosa January 7, 2005 137,100 Buy 8.9341 January 13, 2005 128,000 Buy 8.6452 January 14, 2005 165,000 Buy 9.0330 January 18, 2005 400,000 Buy 9.2586 January 19, 2005 400,000 Buy 9.5761 January 20, 2005 261,600 Buy 9.6044 January 21, 2005 73,600 Buy 9.5893 January 24, 2005 86,100 Buy 9.5302 API January 7, 2005 137,100 Buy 8.9341 January 13, 2005 128,000 Buy 8.6452 January 14, 2005 165,000 Buy 9.0330 January 18, 2005 400,000 Buy 9.2586 January 19, 2005 400,000 Buy 9.5761 January 20, 2005 261,600 Buy 9.6044 January 21, 2005 73,600 Buy 9.5893 January 24, 2005 86,100 Buy 9.5302 David Tepper January 7, 2005 137,100 Buy 8.9341 January 13, 2005 128,000 Buy 8.6452 January 14, 2005 165,000 Buy 9.0330 January 18, 2005 400,000 Buy 9.2586 January 19, 2005 400,000 Buy 9.5761 January 20, 2005 261,600 Buy 9.6044 January 21, 2005 73,600 Buy 9.5893 January 24, 2005 86,100 Buy 9.5302 Franklin January 13, 2005 128,000 Buy $8.6452 Mutual January 14, 2005 165,000 Buy $9.0430 January 18, 2005 400,000 Buy $9.2586 January 19, 2005 400,000 Buy $9.5811 January 20, 2005 261,600 Buy $9.6094 Northbrook NBV LLC Footnote1 December 1, 2004 2,000 Sell $9.147 Footnote1 December 1, 2004 3002 Sell $0.853 Footnote1 December 2, 2004 17,000 Sell $9.292 Footnote1 December 3, 2004 10,000 Buy $9.153 Footnote1 December 6, 2004 14,000 Buy $8.909 Footnote1 December 7, 2004 15,000 Buy $8.754 Footnote1 December 8, 2004 3,0002 Sell $0.74 Footnote1 December 9, 2004 1,0002 Sell $0.8235 Footnote1 December 10, 1,0002 Sell $0.723 2004 Footnote1 December 13, 1,0002 Sell $0.773 2004 Footnote1 December 15, 1,0002 Sell $0.523 2004 Footnote1 December 17, 1,000 Sell $8.98 2004 Footnote1 December 17, 1,0002 Sell $0.774 2004 Footnote1 December 20, 1,000 Buy $8.81 2004 Footnote1 December 20, 3002 Sell $0.752 2004 Footnote1 December 21, 1,0002 Sell $0.773 2004 Footnote1 January 12, 2005 5,000 Sell $8.747 Footnote1 January 13, 2005 5,000 Buy $8.653 Northbrook January 13, 2005 750,000 Buy $8.60 (Footnote3) Footnotes1, January 13, 2005 750,000 Sell $8.60 3 Northbrook January 13, 2005 64,000 Buy $8.6452 Northbrook January 14, 2005 82,500 Buy $9.033 Northbrook January 18, 2005 200,000 Buy $9.2586 Northbrook January 19, 2005 200,000 Buy $9.5761 Footnote1 January 19, 2005 1,0002 Sell $0.8735 Northbrook January 20, 2005 130,800 Buy $9.6044 Footnote1 January 20, 2005 10,600[2] Buy $0.7514 Northbrook January 20, 2005 10,600[2] Sell $0.7514 Northbrook January 21, 2005 10,600[2] Buy $1.05 Northbrook January 21, 2005 36,800 Buy $9.5893 Northbrook January 24, 2005 23,100 Buy $9.5302 Anna Reis January 4, 2005 2,500 Buy $8.84 Spray Trust Alexander January 4, 2005 2,500 Buy $8.84 Reis Spray Trust David Reis January 21, 2005 20,0004 Buy $0.7205 Baylor December 20, 22,000 Buy 9.001 Enterprises 2004 (excluding LLC commissions) Arnold M. December 20, 1,100 Buy $8.98 Whitman 2004 December 20, 3,400 Buy $8.99 2004 ------------------- 1 An entity controlled by Messrs. Hokin and Rubin effected this transaction. Each of the Beverly Enterprises Shares purchased by this entity were sold to Northbrook NBV, LLC on January 13, 2005 in a private transaction at a price of $8.60 per share. See Note 3. 2 Consists of a transaction in respect of July 2005 Call Options exercisable for 100 Beverly Enterprises Shares per option at a strike price of $10.00. 3 Northbrook NBV, LLC acquired these shares of common stock in a private transaction from an entity managed by Messrs. Hokin and Rubin. See Note 1. 4 Consists of a transaction in respect of April 2005 Call Options exercisable for 100 Beverly Enterprises Shares per option at a strike price of $10.00. EX-99.D 5 letter12_22.txt Exhibit D [FORMATION CAPITAL, LLC LETTERHEAD] December 22, 2004 Mr. William R. Floyd Chairman of the Board, President And Chief Executive Officer Beverly Enterprises, Inc. One Thousand Beverly Way Fort Smith, Arkansas 72919 Dear Mr. Floyd: Formation Capital, LLC, ("Formation") is writing to you, in your capacity as Chairman of the Board, to confirm our conversation in which we expressed our interest in acquiring the issued and outstanding shares of Beverly Enterprises, Inc. ("Beverly" or the "Company"). We would expect that you would share this letter with your Board of Directors promptly. Subject to the terms and conditions outlined in this letter, Formation hereby offers to pay the holders of the Company's issued and outstanding shares of common stock, par value $.01 per share (the "Common Stock"), a price of $11.50 per share in cash (the "Offer Price"). This translates into a share price premium of 30% based on the average closing price for the Company's stock over the last twenty trading days. Our Offer Price is based upon a total of approximately 122,850,103 shares of Common Stock outstanding (including an estimated 15,432,103 from the conversion of the 2.75% Convertible Subordinated Notes due 2033), 3,141,006 restricted shares and options to acquire approximately 7,400,000 shares of Common Stock at a weighted average exercise price of approximately $7.50 per share. Holders of such options would be entitled to receive an amount in cash equal to the excess of the Offer Price per share over the exercise price per share of such options. The Offer Price is subject to the completion of business, regulatory, legal and accounting due diligence. However, if our due diligence suggests that there is more value in the Company, we are prepared to raise the Offer Price accordingly. Further, as an alternative to the proposal outlined above, we would be prepared to discuss with the Board of Directors a transaction whereby we would purchase the Company's real estate assets and nursing facilities operations, leaving the Company with the ancillary businesses (consisting of the Aegis Therapies and Home Care operating segments). As we discussed, the acquisition of the ancillary businesses is not part of our core business strategy. We anticipate that the acquisition would be effected through a one-step merger of a new company formed by Formation with and into the Company (the "Transaction"). The Transaction would be financed with $375 million of committed equity financing and the balance in debt. The equity would be contributed by existing Formation investors, Appaloosa Management L.P., ("Appaloosa") and Franklin Mutual Advisers, LLC ("Franklin"). This group currently holds, in aggregate, approximately 4.5% of the Common Stock of Beverly. Based on our discussions with leading financial institutions, we expect to be able to secure the required amount of debt financing. Prior to the execution of a definitive agreement, Formation will deliver to Beverly a binding commitment letter for the debt financing with customary closing conditions. Formation provides equity to the senior housing and long-term care industry. Over the last three years, Formation has acquired an ownership interest in 152 facilities in 20 states. Most recently, in August 2004, Formation acquired Centennial HealthCare, adding 66 facilities to its portfolio. Currently, Formation manages assets in excess of $650 million in value. Appaloosa, formed in 1993, is one of the largest hedge funds in the country, with over $3.5 billion under management. Franklin is a subsidiary of Franklin Resources, Inc., the largest publicly traded mutual fund company in America. Franklin manages the Mutual Series family of public mutual funds, with over $35 billion in assets under management. We are prepared to immediately commence our business, regulatory, legal and accounting due diligence review of the Company, and believe that we could complete this work within 30 days after being provided or given access to the items necessary to complete our due diligence. Therefore, assuming cooperation by the Company, we believe that our due diligence could be completed and a fully financed definitive agreement could be negotiated and executed within four to six weeks. This proposal is being provided to you on a confidential basis and we would expect that you will not disclose this proposal to anyone other than your Board of Directors, legal and financial advisors. The terms of this letter are intended as an outline of certain material terms of the proposed Transaction, but are not binding on you, the Company or us and do not include all the material terms, conditions, covenants, representations, warranties and other provisions that will be contained in a definitive agreement and other documentation. We are prepared to discuss all aspects of this proposal with the Company, its Board of Directors and its advisors at their earliest convenience. If you have any questions about this proposal, please do not hesitate to call me at (770) 754-9660. We look forward to your prompt response. Sincerely, Formation Capital, LLC /s/ Arnold M. Whitman ------------------------------ Arnold M. Whitman Chief Executive Officer EX-99.E 6 beverlyenterprisesletter.txt Exhibit E [BEVERLY ENTERPRISES LETTERHEAD] January 5, 2005 Arnold M. Whitman Chief Executive Officer Formation Capital, LLC 1035 Powers Place Alpharetta, GA 30004 Dear Arnie: Thank you for your letter dated December 27, 2004 indicating Formation's interest in discussing alternatives for Beverly Enterprises, Inc. I have shared your letter with our Board of Directors. The Board has engaged appropriate advisors to assist them in evaluating your indication of interest. We have scheduled a Board meeting in late January to engage in a discussion, which will take into account all relevant factors. We appreciate your interest in Beverly Enterprises. Very truly yours, /s/ William R. Floyd -------------------------------- William R. Floyd Chairman of the Board, President and Chief Executive Officer cc: Board of Directors EX-99.F 7 responseletter1_18.txt Exhibit F [FORMATION CAPITAL, LLC LETTERHEAD] January 19, 2005 Mr. William R. Floyd Chairman of the Board, President And Chief Executive Officer Beverly Enterprises, Inc. One Thousand Beverly Way Fort Smith, Arkansas 72919 Dear Bill: Thank you for your letter dated January 5, 2005. We look forward to hearing from you on January 24, 2005 following your scheduled Board of Directors meeting. In the interim, we thought we might facilitate your Board's discussions by providing some additional detail regarding our acquisition proposal. First, Formation Capital, LLC, ("Formation") would like to reiterate our offer to acquire the issued and outstanding shares of common stock of Beverly Enterprises, Inc. ("Beverly" or the "Company") at $11.50 per share (the "Offer Price"), subject to the terms and conditions outlined in our December 22, 2004 letter. Alternatively, as also indicated in our previous letter, we are prepared to undertake a transaction whereby we would purchase the Company's real estate assets and nursing facilities operations (the "SNFs"), leaving the Company with the Aegis Therapies business and Home Care operating segment (the "Ancillary Businesses"). Further, we would anticipate that as part of such a transaction, we would enter into contractual agreements whereby Beverly would continue to provide ancillary services to the nursing facilities. We believe this transaction could be structured in several ways and we would seek to adopt an approach which is most tax efficient for current Beverly shareholders. Subject to the completion of business, regulatory, legal and accounting due diligence, we are prepared to pay $9.00 per share in cash for the SNFs (the "Asset Offer Price") and assume all liabilities not related to the Ancillary Businesses. This alternative would leave Beverly with a pure-play ancillary company, which we believe would trade at approximately a valuation of $4.00 per share, in line with public comparables. Thus, a transaction of this nature could result in a value to shareholders of $13.00 per share. As with respect to a transaction whereby we would acquire the entire Company, we remain prepared to raise the Offer Price accordingly if our due diligence suggests that there is more value in the Company. Once again, this expanded proposal is being provided to you on a confidential basis and we would expect that you will not disclose this proposal to anyone other than your Board of Directors, legal and financial advisors. The terms of this letter are intended as an outline of certain material terms of a proposed transaction, but are not binding on you, the Company or us and do not include all the material terms, conditions, covenants, representations, warranties and other provisions that will be contained in a definitive agreement and other documentation. We remain prepared to discuss all aspects of this proposal with the Company, its Board of Directors and its advisors at their earliest convenience. If you have any questions, please do not hesitate to call me at (770) 754-9660. Sincerely, Formation Capital, LLC /s/ Arnold M. Whitman -------------------------- Arnold M. Whitman Chief Executive Officer EX-99.G 8 sillstermsheet.txt Exhibit G PROJECT SILLS OPERATING AGREEMENT SUMMARY TERM SHEET MEMBERSHIP Appaloosa Management L.P. ("Appaloosa"), Franklin Mutual Advisers, LLC ("Franklin"), Formation Capital, LLC ("Formation") and Eureka Capital Markets, LLC ("Eureka") and collectively, (the "Members") have determined to work together with the intent to effect a transaction whereby they would acquire control of not less than 80% of the shares of Sills Enterprises, Inc. ("Sills") or its real estate assets and SNF operations. The acquisition will be made through a newly formed Delaware limited liability company ("Newco"), which will be funded through equity contributed by Appaloosa, Franklin and Formation. In addition, Formation and Eureka will contribute 50% of the financial advisory fee (see Fees and Expenses) to Newco as Class A equity. EQUITY CONTRIBUTION Appaloosa will make an equity contribution to Newco equal to $150 million. Franklin will make an equity contribution to Newco equal to $175 million. Formation will make an equity contribution to Newco equal to $50 million. The remaining equity will be raised by the Members as necessary. All of the Members of Newco contributing capital will receive Class A Membership Interests in return for their capital contributions. The obligation of each Member to fund their equity contribution would be conditioned upon mutual agreement of the Members as to all economic terms of the transaction, Newco receiving offers to purchase not less than 80% of the shares of Sills, the successful conclusion of a merger agreement or such other transaction as the Members find acceptable. Any Member who owns shares of Sills prior to the commencement of the tender offer or merger shall contribute such shares to Newco as part of such Member's equity contribution at the offer price or merger consideration. RESTRUCTURING TRANSACTIONS Sills will undertake such restructuring transactions as will be mutually agreed upon by the Members. PURCHASES IN ADVANCE OF TENDER OR MERGER The Members will disclose to each other all purchases of shares in Sills prior to the date of this Term Sheet made by such parties or any other person that is an investor in, member of or that could otherwise be aggregated with such person under SEC rules (collectively, the "Purchasing Persons"). All future purchases of shares in Sills to establish a position shall be coordinated through Eureka. CAPITAL DISTRIBUTIONS The real estate entity will distribute cash to the Members monthly to the extent that such cash is available for distribution after satisfying (i) any outstanding payments due on or under each of the debt financings; and (ii) any outstanding payments due under the Asset Management Agreement as defined below. CLASS A PREFERRED RETURN The Class A Members shall receive an annual cumulative preferred return of 10% on their outstanding capital contributions. CARRIED INTEREST Newco will enter into an Asset Management contract with Formation. Further, there will be the issuance of Class B shares which will provide for a "carried interest" or profit override. Both agreements will be negotiated and documented prior to closing. The Carried Interest will be equal to 16% of the Return on Capital following the payment to the Class A Members of the Class A Preferred Return plus Return of Capital (and 25% of the returns once the Class A Members have received a 40% Return on Capital as defined below). The Carried Interest will be distributed in the following manner: Formation will receive 13.5%, and Eureka will receive 2.5% up to a 40% Return on Capital to Class A Members and thereafter, Formation will receive 18.375% and Eureka will receive 6.625%. RETURN OF CAPITAL Members shall be entitled to receive a return of their capital upon the happening of a capital event such as a refinancing or a sale of substantially all of the real estate properties. RETURN ON CAPITAL Return on Capital shall be measured as the cash on cash return received by Members. If Members receive shares in a public entity, the Return on Capital shall be measured as the six month weighted average trading value of the shares less a 10% discount following any lock-up period. MOST FAVORED NATIONS PROVISION Class A Members agree that they will be treated equally from a financial standpoint except as agreed to in this Term Sheet. Any and all "Side Operating Agreements" between Formation and any Class A Member(s) as well as agreements between Class A Members themselves, will be fully disclosed. ASSET MANAGEMENT FEE Pursuant to one or more asset management agreements, Formation Capital Asset Management, LLC, or its designee ("FCAM") will be paid an asset management fee equal to $15,000 per facility per annum plus reasonable reimbursement of third party expenses less $500,000. Third party expenses will be approved by the Management Committee. $500,000 per annum for general financial and legal advisory services to Newco will be retained by Newco and expended pursuant to the direction of the Management Committee. To the extent the amounts expended by Newco for financial and legal advisory are less than $500,000 per annum, the difference will be remitted to Formation. FEES AND EXPENSES Prior to closing, Appaloosa, Franklin and Formation will pay all reasonable fees and expenses relating to the acquisition of Sills to unaffiliated third parties in an amount not to exceed $7.0 million ("Pre-Closing Fees") in proportion to their equity contribution, provided however, approval of such Pre-Closing Fees shall be required by the Members prior to occurrence. At closing, all fees and expenses will be borne by Appaloosa, Franklin and Formation in proportion to their equity contributions. Projected fees and expenses are scheduled on Exhibit A. Pre-Closing Fees incurred by Class A Members will be credited as a capital contribution to Newco. Upon closing, a Financial Advisory fee equal to the lesser of $8.2 million or 0.5% of Total Consideration whereby Total Consideration shall be defined as the cash paid for not less than 80% of the shares of Sills or its real estate assets and SNF operations reduced by the value of any operations or subsidiaries "spun off" to or returned to shareholders of Sills. The Financial Advisory fee will be distributed in the following manner: Formation will receive 37.5% and Eureka will receive 50%. The remaining 12.5% of the Financial Advisory fee will be retained by Newco for general working capital. A minimum of 50% of the financial advisory fees received by Formation and Eureka shall be contributed by Formation and Eureka to Newco in return for Class A Membership Interests. BREAK-UP FEE To the extent the Members enter into an agreement with Sills whereby they are entitled to a Break-Up Fee, such fee will first be applied to pay or reimburse the Class A Members pro rata for Pre-Closing Fees and after payment of all such fees and expenses in full, 70% will be distributed to the Class A Members in proportion to their equity contribution. The remaining 30% will be distributed 15% to Eureka and 15% to Formation. MANAGEMENT COMMITTEE The Management Committee will initially have six members. Appaloosa, Franklin and Formation will each appoint two members. To the extent substantial additional equity is contributed to Newco by a party other than the Members, a maximum of one additional member may be designated to the Management Committee provided Members approve such designation. Four votes will constitute voting control over those corporate actions referred to the Management Committee for approval, which shall include, but not be limited to: (i) acquisitions or disposals of assets; (ii) filing for bankruptcy protection; (iii) dissolution of Newco; (iv) appointment of a receiver; (v) merger of Newco with or into another Person; (vi) leasing or renting any property; (vii) changes in capitalization or the rights relative to various classes of shares; (viii) admission of new members; (ix) debt incurrence; (x) changes in the composition of the Management Committee; (xi) material modification of business plans or budgets; (xii) approval of key management employment contracts, (xiii) certain provisions for an exit covering the sale or an initial public offering of shares of Newco, (xiv) material contracts with affiliates of any Member; and (xv) changes to the operating agreement. Formation Capital or its designee shall serve as the Manager of Newco and shall have authority to control all day-to-day decisions of Newco other than matters referred to the Management Committee. REMOVAL OF ASSET MANAGER FCAM may be removed at any time as the Asset Manager by a vote of Members representing 51% of the capital of Newco. Under a "For Cause" termination, defined as (i) gross negligence, willful misconduct or fraud of FCAM or (ii) insolvency, involuntary reorganization or bankruptcy of FCAM or Newco, FCAM will disgorge its Class B shares. Formation agrees that they will not resign as Asset Manager without the consent of 75% of the Class A Members. In the event of such a voluntary resignation Formation will forfeit their Class B shares. In the event of a termination other than "For Cause" Newco shall pay FCAM a Termination Fee equal to six months' asset management fees. In the event of a "For Cause" termination, Formation would not be entitled to a Termination Fee. In the event there is a liquidity occurrence including, but not limited to a public offering, refinancing or sale of substantially all of the real estate properties at any time, FCAM may be terminated without cause and will not be entitled to a termination fee and further, no party will be entitled to an asset management fee unless and until agreed to by the board of directors of the public company. EXCLUSIVITY Pursuant to a Confidentiality, Non-Circumvention and Exclusivity Agreement, the parties shall represent and warrant that there is no existing agreement, understanding, letter of intent or other commitment or arrangement of any kind between such party and any other person, concerning the acquisition of the shares or assets of Sills. Until the later of (i) 90 days; (ii) the date that the parties agree in writing to abandon the transactions contemplated hereby; or (iii) the consummation of the transactions contemplated hereby: (i) None of the parties hereto will directly or indirectly, through any representative or otherwise, solicit offers from, or in any manner encourage any proposal from any other person relating to the acquisition of Sills shares or assets, in whole or in part, whether directly or indirectly, through purchase, merger, consolidation or otherwise; and (ii) Such person will immediately notify Formation and Eureka regarding any contact between such person and any person regarding any such offer, proposal or related inquiry unless such person is precluded from doing so by applicable law or regulation or other contractual agreement. CONFIDENTIALITY Except and to the extent required by law, without the prior consent of the other parties hereto, none of the parties hereto will make (and each will direct its representatives not to make), directly or indirectly, any public comment, statement or communication with respect to, or otherwise disclose or permit the disclosure of the existence of discussions regarding a possible transaction in which the parties will participate or any of the terms, conditions or other aspects of the transactions proposed in this letter. If a party is required by law to make such a disclosure, it must first provide to the other parties hereto the content of the proposed disclosure, the reasons that such disclosure is required by law and the time and place at which such disclosure will be made. NON-CIRCUMVENTION No party shall use any of the information disclosed in this Term Sheet or otherwise by the parties hereto for any purpose other than to evaluate and carry out the transactions contemplated by this Term Sheet substantially in accordance with its terms. IN WITNESS WHEREOF, the parties have executed this Term Sheet as of this 14th day of December, 2004. APPALOOSA MANAGEMENT L.P., on behalf of certain funds for which it acts as investment adviser By:/s/ Ronald Goldstein ------------------------------- Ronald Goldstein Vice President EUREKA CAPITAL MARKETS, LLC By:/s/ Stephen A. Greene ------------------------------- Stephen A. Greene Managing Director FORMATION CAPITAL, LLC By:/s/ Arnold M. Whitman ------------------------------- Arnold M. Whitman Chief Executive Officer FRANKLIN MUTUAL ADVISERS, LLC By:/s/ Michael Embler ------------------------------- Michael Embler Senior Vice President EX-99.H 9 dgex99h.txt Exhibit H FORMATION CAPITAL, LLC January 24, 2005
Appaloosa Management, L.P., Northbrook NBV, LLC, on behalf of itself on behalf of itself and each of and each of Messrs. Hokin, Rubin and Hartman the Appaloosa Filers, 500 Skokie Blvd, Suite 310 26 Main Street, First Floor Northbrook, IL 60062 Chatham, NJ 07928 Franklin Mutual Advisers, LLC David Reis, as trustee of each of the Reis Trusts, 51 John F. Kennedy Parkway 19 Hilltop Place Short Hills, NJ 07078 Rye, NY 10580 Baylor Enterprises LLC Arnold M. Whitman David Reis, in his personal c/o Formation Capital, LLC c/o Formation Capital, LLC capacity 1035 Powers Place 1035 Powers Place 19 Post Road Alpharetta, GA 30004 Alpharetta, GA 30004 East Westport, CT 06880
Ladies and Gentlemen: Formation Capital, LLC ("Formation"), Appaloosa Management L.P. ("Appaloosa"), Appaloosa Investment Limited Partnership ("AILP"), Palomino Fund Ltd. ("Palomino"), Appaloosa Partners Inc. ("API"), David A. Tepper (Mr. Tepper, together with Appaloosa, AILP, Palomino, and API, the "Appaloosa Filers"), Franklin Mutual Advisers, LLC ("Franklin"), Northbrook NBV, LLC ("Northbrook"), David Hokin, Rob Rubin, Robert Hartman, David Reis, in his personal capacity and in his capacity as trustee of each of the Reis Trusts, the 1995 David Reis Family Trust ("1995 DRF Trust"), the 1995 Donna Reis Family Trust ("Donna Trust"), the Aaron Reis Spray Trust ("Aaron Trust"), the Anna Reis Spray Trust ("Anna Trust"), the Alexander Reis Spray Trust ("Alexander Trust") and the David Reis Family Trust ("DRF Trust"), Baylor Enterprises LLC ("Baylor") and Arnold M. Whitman (collectively, the "Filing Persons") are considering making a joint proposal to acquire, through an entity ("Newco") to be formed by Formation and/or its affiliates, all of the outstanding shares of capital stock of Beverly Enterprises, Inc. (the "Company"). In that connection, each Filing Person acknowledges and agrees that it and its affiliates may be deemed to have formed a "group" (within the meaning of Section 13(d)(3) of the Securities Exchange Act of 1934 (the "Exchange Act")) with the other Filing Persons and their affiliates for the purpose of acquiring shares of common stock, par value $.10 per share, of the Company ("Company Common Stock"). In order to ensure that each of the Filing Persons and its affiliates have available to them on a timely basis all information required to be included in a Schedule 13D (including amendments thereto) required to be filed by such Filing Person and its affiliates, the Filing Persons hereby agree as follows: 1. Each of the Filing Persons represents and warrants to each of the other Filing Persons that as of the date hereof it beneficially owns (within the meaning of Section 13(d)(3) of the Exchange Act) the securities of the Company listed above its name on the signature page hereto. 2. Each of the Filing Persons will timely provide to the other Filing Persons all information with respect to such Filing Person and its affiliates (or, with respect to such Filing Person and its affiliates, any of the persons enumerated in Instruction C to Schedule 13D) required to be included by the other Filing Person in any Schedule 13D or amendment thereto required to be filed by them with respect to the Company Common Stock. Without limiting the generality of the foregoing, if on any day, a Filing Person or any of its affiliates (or, with respect to such Filing Person and its affiliates, any of the persons enumerated in Instruction C to Schedule 13D) effects any purchase or sale of shares of Company Common Stock, such Filing Persons shall promptly (but in any event within one business day) notify the other Filing Persons of (i) the identity of the entity that effected the transaction and the identity of such entities that have sole or shared power to vote and/or dispose of such shares and/or any entities entitled to or having the power to receive the proceeds from the sale of such shares, (ii) the date of the transaction, (iii) the number of shares purchased and/or sold, (iv) the price paid or received per share purchased or sold and (v) where and how the transaction was effected. 3. Each of the Filing Persons shall promptly (but in any event within one business day) provide to the other Filing Persons a copy of any written agreement, contract, arrangement, understanding, plan or proposal, entered into by it or any of its affiliates (or, with respect to such Filing Person and its affiliates, any of the persons enumerated in Instruction C to Schedule 13D) that is required to be disclosed under Item 7 of Schedule 13D. 4. The terms of this letter agreement shall be binding upon each of the Filing Persons; provided that any Filing Person may withdraw as a party to this letter agreement (and shall thereafter not be required to comply with the terms hereof) by delivering to the other Filing Persons a written statement certifying that such Filing Person and its affiliates have no further agreement, arrangement or understanding with the other Filing Persons and their respective affiliates with respect to the acquiring, holding, voting or disposing of shares of Company Common Stock. No such withdrawal by a Filing Person shall relieve it from liability for any breach by such Filing Person of this letter agreement occurring prior to such withdrawal. 5. Each Filing Person (the "Indemnifying Party") hereby agrees to indemnify, defend and hold harmless each of the other Filing Persons and their respective directors, officers, employees, agents, advisors, consultants, representatives, affiliates, successors and assigns (each an "Indemnified Party") from and against any and all losses, liabilities, obligations, payments, claims, damages, charges, taxes, judgments, fines, penalties, amounts paid in settlement, costs and expenses (including interest which may be imposed in connection therewith, costs and expenses of investigation and fees, expenses and disbursements of counsel, consultants and other experts) sustained, incurred or suffered by or asserted against any Indemnified Party in respect of (i) any breach of the Indemnifying Party's representations and warranties contained in this letter agreement, (ii) the Indemnifying Party's failure to perform or otherwise fulfill any of its agreements, covenants, obligations or undertakings hereunder or (iii) any breach of the Indemnifying Party's certifications, representations or warranties contained in any written statement delivered by such Indemnifying Party pursuant to this Letter Agreement. Notwithstanding any other provision of this letter agreement, the terms of this Section 5 shall survive and be binding upon each Filing Person until the fifth anniversary of the date such Filing Person withdraws as a party to this letter agreement by complying with the provisions of Section 4 hereof. 6. This letter agreement shall be governed by the laws of the State of New York, without regard for the conflicts of law principles thereof. [signature page follows] Please confirm your agreement with the foregoing by executing and returning a copy of this letter to us. Dated: January 24, 2005 FORMATION CAPITAL, LLC By: /s/ Arnold M. Whitman ------------------------------------ Name: Arnold M. Whitman Title: Chief Executive Officer ACCEPTED AND AGREED: Holder of 1,873,122 shares of Company Common Stock: APPALOOSA INVESTMENT LIMITED PARTNERSHIP I By: APPALOOSA MANAGEMENT L.P., Its General Partner By: APPALOOSA PARTNERS INC., Its General Partner By: /s/ David A. Tepper ----------------------------------- Name: David A. Tepper Title: President Holder of 1,641,178 shares of Company Common Stock: PALOMINO FUND LTD. By: APPALOOSA MANAGEMENT L.P., Its Investment Adviser By: APPALOOSA PARTNERS INC., Its General Partner By: /s/ David A. Tepper ----------------------------------- Name: David A. Tepper Title: President Holder of 3,514,300 shares of Company Common Stock: APPALOOSA MANAGEMENT L.P. By: APPALOOSA PARTNERS INC., Its General Partner By: /s/ David A. Tepper --------------------------- Name: David A. Tepper Title: President Holder of 3,514,300 shares of Company Common Stock: APPALOOSA PARTNERS INC. By: /s/ David A. Tepper ------------------------ Name: David A. Tepper Title: President Holder of 3,514,300 shares of Company Common Stock: /s/ David A. Tepper ------------------------------- DAVID A. TEPPER Holder of 3,508,900 shares of Company Common Stock: FRANKLIN MUTUAL ADVISERS, LLC By: /s/ David J. Winters --------------------------- Name: David J. Winters Title: President, Chief Executive Officer and Chief Investment Officer Holder of 1,487,200 shares of Company Common Stock: NORTHBROOK NBV, LLC By: /s/ Rob Rubin -------------------------- Name: Rob Rubin Title: Manager Holder of 1,487,200 shares of Company Common Stock: /s/ David Hokin ------------------------------- DAVID HOKIN Holder of 1,487,200 shares of Company Common Stock: /s/ Rob Rubin ------------------------------- ROB RUBIN Holder of 1,487,200 shares of Company Common Stock: /s/ Robert Hartman ------------------------------- ROBERT HARTMAN Holder of 10,000 shares of Company Common Stock: 1995 DAVID REIS FAMILY TRUST By: /s/ David Reis -------------------------- Name: David Reis Title: Trustee Holder of 25,000 shares of Company Common Stock: 1995 DONNA REIS FAMILY TRUST By: /s/ David Reis -------------------------- Name: David Reis Title: Trustee Holder of 20,000 shares of Company Common Stock: AARON REIS SPRAY TRUST By: /s/ David Reis -------------------------- Name: David Reis Title: Trustee Holder of 22,500 shares of Company Common Stock: ANNA REIS SPRAY TRUST By: /s/ David Reis -------------------------- Name: David Reis Title: Trustee Holder of 22,500 shares of Company Common Stock: ALEXANDER REIS SPRAY TRUST By: /s/ David Reis -------------------------- Name: David Reis Title: Trustee Holder of 22,500 shares of Company Common Stock: DAVID REIS FAMILY TRUST By: /s/ David Reis -------------------------- Name: David Reis Title: Trustee Holder of 20,000 shares of Company Common Stock: /s/ David Reis -------------------------------- DAVID REIS Holder of 22,000 shares of Company Common Stock: BAYLOR ENTERPRISES LLC By: /s/ Arnold M. Whitman -------------------------- Name: Arnold M. Whitman Title: Managing Member Holder of 26,500 shares of Company Common Stock: /s/ Arnold M. Whitman ------------------------- ARNOLD M. WHITMAN